From denationalisation to wholesale broadband access: a retrospective of regulatory policies in the UK for the communications industry

Deshpande, Advait and Jones, Allan
(2014).
From denationalisation to wholesale broadband access: a retrospective of regulatory policies in the UK for the communications industry.Competition and Regulation in Network Industries, 15(3) pp. 232–257.

Abstract

This paper examines the shifting regulatory policies in the United Kingdom (UK) across three market segments, telecommunications, radio/television and cable, starting with British Telecom’s (BT’s) denationalisation in 1984. For the period examined, this paper focuses on following key events:

–The phased liberalisation of the UK communications industry starting with the BT-Mercury Communications duopoly in 1984
–The allocation of cable franchises as regional monopolies in the mid-1980s
–Introduction of satellite broadcasting and the influence of British Sky Broadcasting (BSkyB) Corp. on broadcasting services in the 1990s
–The emergence of the Internet/Web and the subsequent development of a broadband policy from mid-1990s onwards

Drawing on Dodgson et al.’s concepts of Market logic, Coordination Logic, and Complex-Evolutionary Logic, the authors argue that the forms of regulation introduced shaped the ways the UK communications industry developed. Thus although the denationalisation grew out of a free market ideology, in practice the free market philosophy was tempered for a number of pragmatic reasons. Prominent among these was a need to create a competitive market in a context where competitors would be unlikely to emerge without regulatory intervention, and an emphasis on price competitiveness to ensure that the end-users benefitted from the best possible prices on available products and services. Subsequent events show that these interventions had unintended consequences. The unforeseen popular demand for Internet/Web access found regulators struggling to find ways to promote a competitive market, and incumbent operators struggling to find a way to offer a suitable product.

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